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The Morning Ledger: Companies Capitalize on Market Rally

By

David Hall

Mar 7, 2013 6:42 am ET

Companies are capitalizing on the stock market’s recent rally by tapping investors to fund growth or make acquisitions. Public companies have raised $35.1 billion in secondary offerings of stock in the U.S. since the beginning of the year, marking the strongest start to any year since 2000, the WSJ’s Telis Demos says.

For big companies, stock sales are often seen as a sign of weakness, since they typically take place at a discount to the market price, Demos notes. And shareholders generally don’t like to see the value of their shares diluted. But for companies that don’t have access to debt markets because they’ve already raised a lot of debt, or that have a small number of shares on the market, the issuance of stock can be a sign of growth.

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Boards and C-suite executives overwhelmingly see risk as having an important role in value creation, but just 17% of respondents say they are actively using risk to drive returns, according to a new global survey from Deloitte. The survey also found that senior stakeholders want chief risk officers to spend significantly more time playing the strategist role, with a majority of respondents saying their risk officers should participate more in setting the strategic direction of the company and aligning risk management strategies accordingly.

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